Applegreen plc Preliminary Results Presentation. 14 th March 2017

Transcription

1 2016 Preliminary Results Presentation 14 th March 2017

2 Disclaimer 2016 Preliminary Results Presentation Page 2 This presentation (hereinafter this document ) has been prepared by Applegreen plc (the Company ) for information purposes only. This document has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. This document is neither a prospectus nor an offer nor an invitation to apply for securities. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers or employees, any of its advisers or any other person as to the accuracy or completeness of the information or opinions contained in this document and no responsibility or liability whatsoever is accepted by the Company or any of its members, directors, officers or employees, any of its advisers nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. Certain information contained herein may constitute forward-looking statements which can be identified by the use of terms such as may, will, should, expect, anticipate, estimate, intend, continue, target or believe (or negatives thereof) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. A number of factors could cause results and developments of the Company to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors.

3 Agenda 2016 Preliminary Results Presentation Page 3 1. Introduction & Highlights 2. Estate Growth and Development 3. Financial Review 4. Outlook 5. Appendices 6. Q & A

4 1. Introduction & Highlights 2016 Preliminary Results Presentation Page 4

5 Highlights 2016 Preliminary Results Presentation Page 5 16% increase in gross profit on 2015 (20% in constant currency) Adjusted EBITDA increased 11% from 28.9m in 2015 to 32.0m in 2016 (14.5% constant currency). Key factors: Continued expansion of the estate Strong LFL store performance in Ireland Growth in food across Ireland and UK Estate expanded to 243 sites at 31 December 2016 with capex of 60.3m in 2016 ( m) Maiden dividend of 1.25c per share Announced the proposed acquisition of 50% of the Joint Fuels Terminal in Dublin port, scheduled to complete Q2 New franchise relationships developed with Freshii and 7-Eleven and a new Costa Café concept introduced to the UK market. 32 new food outlets opened Net debt position at 31 December 2016 of 19m Adj. EBITDA Growth m 18% CAGR 28.9m 32.0m Site Growth 26% CAGR Dec-14 Dec-15 Dec-16 (1) EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment charges. Adjusted EBITDA refers to normalised trading EBITDA, being EBITDA adjusted for share based payments & non-recurring items ROI PFS UK PFS Service Areas Dealer USA

6 2016 Preliminary Results Presentation Page 6 Distinctive convenience retail offering in the forecourt sector Low Fuel Prices Always Better Value Always Food and beverage focus Local price promise Tailored retail offer Impulse/ ultra-convenience focus Mix of own and international brands Tailored offer by location Number of Food Offers at 31 December 2016

7 2. Estate Growth and Development 2016 Preliminary Results Presentation Page 7

8 Applegreen plc 2016 Preliminary Results Presentation Page 8 Site Categories Service Area Sites Petrol Filling Stations ( PFS ) Motorway Service Areas ( MSA ) Company Owned MSA s are located on motorways with large facilities and extensive parking and at least three food offers Traditional forecourt, store offer and food to go either own brand / Subway MSA s offer an own brand food and beverage offer (Bakewell & acafé) and a range of internationally recognised food brands - Burger King, Subway, Costa Coffee, Greggs, Lavazza, Chopstix and Freshii Relevant retail proposition built to reflect local demographic Value offer in store built on own brand and promotion Ongoing rebrand / facility development opportunities Typically brown / green field developments Trunk Road Service Areas ( TRSA ) MSA TRSA s are mid-size sites on trunk roads with seating areas and one to three food and beverage offerings High end stores with attractive ambiance Dealer PFS owned by operator, 5 year fuel supply agreements Typically brown / green field developments TRSA Fixed margin per litre to dealer PFS

9 Republic of Ireland: Service Areas 2016 Preliminary Results Presentation Page 9 27 service areas in ROI including 9 MSA s, 6 under 25 year licence from Transport Infrastructure Ireland ( TII ) Four new TRSAs opened in ROI during 2016 One new TRSA opened in February 2017 Two new TRSAs to commence construction shortly (including one redevelopment of an existing PFS) will open Q Strong pipeline of TRSAs in planning process Site Growth Birdhill MSA 0 Dec-14 TRSA MSA Dec-15 Dec Cap Ex 18.5m 12.9m 6.9m

10 2016 Preliminary Results Presentation Page 10 Republic of Ireland: PFS, Dealer and Fuelcard Petrol Filling Stations- company owned Five new PFS sites in ROI in 2016, one existing PFS upgraded to a TRSA 140 Site Growth % of company owned estate in ROI now branded Applegreen 11 rebrands / upgrades completed during 2016 One new PFS opened in 2017 and three additional PFS sites subject to CCPC approval Healthy pipeline for Petrol Filling Stations - dealer owned 15 new dealer sites opened in 2016 with four additional sites opened since year end 0 Dec-14 Dec-15 Applegreen Unbranded Dealer Dec-16 Dealer now accounts for 16% of ROI volumes Fuelcard Now accounts for 7% of ROI fuel volumes Positive and growing earnings Extended to UK during Cap Ex 15.4m 1.4m 9.1m 4.2m 5.2m 2.0m 0.5m 4.1m 9.8m 2.4m 2.3m 3.0m New sites Rebrands Dealer

11 2016 Preliminary Results Presentation Page 11 UK: Service Areas Service Areas Six service areas in UK including two MSAs both in Northern Ireland Award winning Lisburn site opened in March 2016 on M1 Southbound in Northern Ireland Three TRSA sites opened in 2016 including two upgraded from PFS sites Further MSA opened in Northern Ireland in February 2017 on M1 Northbound Good development of pipeline of both MSAs and TRSAs Additional PFS upgraded to TRSA in February 2017 Construction commenced on two TRSAs to open by Q Further sites in planning process Several potential MSA sites in the early stages of planning process Cap Ex and Year End Site Numbers m 13.1m m Capex- UK SA Site Numbers- UK SA Slade End TRSA Lisburn Southbound MSA

12 2016 Preliminary Results Presentation Page 12 UK: PFS Petrol Filling Stations- Company Owned 13 new PFS sites in UK in 2016 with a balanced mix of leasehold and freehold sites Three new sites opened since 31 December 2016, good pipeline Seven rebrands/ upgrades completed during 2016 including two upgraded to TRSAs 35% of the UK estate branded Applegreen at 31 December 2016 (up from 24% at IPO) Rebrand/ upgrade programme ongoing Site Growth Dec Dec Dec-16 Ipswich PFS Applegreen Unbranded Cap Ex m 4.5m 8.6m 7.1m 2.8m 3.2m 5.8m 8.5m 3.8m New sites Rebrands

13 2016 Preliminary Results Presentation Page 13 USA Petrol Filling Stations US operations now trading for 2.5 years; profitable in 2016 Cap Ex and Year End Site Numbers Master lease signed with CrossAmerica Partners in Q3 for New England sites o Five of these taken over in Q4 adding to 6 in Long Island ( LI ) Franchise relationship signed with 7-Eleven; Hempstead, LI now trading as 7-Eleven Two sites added since year end including first potential TRSA Actively exploring other opportunities Strengthening management team Management confident that USA is a viable market for expansion o Ample supply of leasehold expansion opportunities for corporate operator m m 0.5m Capex- USA Site numbers- USA Hempstead PFS

14 Applegreen plc 2016 Preliminary Results Presentation Page 14 Awards reflecting strong industry recognition Retail Excellence Ireland Best Forecourt of the Year 2016 Wicklow Service Area NACS Convenience Retailer of the Year Award M1 Lisburn Service Area Irelands Forecourt and Convenience Awards Green Store of the Year Mountgorry Northern Ireland s Neighbourhood Retailer Awards Forecourt of the Year Ballymena

15 3. Financial Review 2016 Preliminary Results Presentation Page 15

16 Profit and Loss Account: 2016 Results 2016 Preliminary Results Presentation Page m 2015 m %Var Revenue 1, , % Gross Profit % Selling & Distribution Costs (93.8) (78.5) Administrative Expenses (21.2) (19.5) Other income Adjusted EBITDA % Depreciation & Amortisation (11.2) (8.7) Impairment (0.4) 0.0 Finance Costs, net 0.5 (2.5) Adjusted PBT % Tax (2.3) (2.1) Adjusted PAT % 16% growth in gross profit leading to 11% growth in adjusted EBITDA (14% at constant currency) Growth in S&D mainly reflects growth in scale of business Finance costs a positive number due to FX gain on Sterling loan Increase in admin reflects in particular growth in development costs and increased resource in UK Adjusted EBITDA % Share Based Payments (1.4) (2.7) Non-recurring charges 0.0 (1.1) Reported EBITDA % Adjusted EPS (cents) Dividends per Share (cent)

17 Revenue and Gross Profit Analysis 2016 Preliminary Results Presentation Page 17 Dec 16 m Dec 15 m Growth % L4L const curr % Fuel Revenue % (5.2%) Food Revenue % 12.4% Store Revenue % 4.5% Total Revenue 1, , % (2.9%) Fuel Gross Profit % (3.3%) Food Gross Profit % 9.6% Store Gross Profit % 8.3% Total Gross Profit % 4.2% Non Fuel Total m m Growth % % Revenue % 7.1% Gross Profit % 8.9% Total gross profit of 145.8m reflecting growth of 15.8% from prior year Strong growth in food and store sales at 18.8% with LFL growth (at constant currency) of 7.1% which is reflected in the gross profit growth numbers Food GP % impacted by scheduled increase in % charged by Irish Transport authority on revenues in their six MSA sites. Excluding that, LFL constant currency increase in food GP was 13.1% Store revenue growth reflects strong LFL growth in ROI Fuel gross profit decreased by 3.3% on a LFL constant currency basis reflecting impact of rising prices throughout the period and higher fuel card mix in Ireland

18 2016 Preliminary Results Presentation Page 18 Geographical Revenue and Gross Profit Mix 2016 Revenue and Gross Profit by geography 2% 2% % 80 39% % 59% 20 US UK Ireland UK as a region accounts for 27% of total gross margin for the period Continued evolution of mix of gross profit Food accounts for 33% of gross profit 38% in ROI up from 36% in % in the UK compared to 16% in Revenue Gross Profit Gross Profit Mix- ROI Gross Profit Mix- UK m 103.3m 31% Store Food m 39.5m 31% Store Food 80 31% Fuel 30 32% Fuel % 38% 33% 31% % 22% 52% 47%

19 Gross Profit: Fuel 2016 Preliminary Results Presentation Page 19 Fuel Gross Profit m 32.4m Continued rising oil prices created difficult backdrop for margins during the year m 18.7m In Ireland this was compounded by the mix of sales with a higher volume of fuel card 10 5 Competitive environment has remained the same in the UK while in Ireland main players have continued to upgrade their offer 0 IRL UK Gross Profit Growth % L4L const curr % Ireland 8.0% (4.8%) UK 3.3% (0.6%) Total Gross Profit 8.2% (3.3%)

20 2016 Preliminary Results Presentation Page 20 Cashflow Summary 2016 m 2015 m Profit Before Tax Non- cash Adjustments Working Capital Movement Taxes Paid (1.4) (2.9) Cash flows from Operating Activities Strong cash conversion figure, increase on 2015 driven by rise in fuel price Growth in negative working capital reflects volume growth driven by expansion Capital Expenditure (61.7) (54.8) Proceeds from the issue of Shares Capital Contributions/ Option Proceeds Long-Term Borrowings (3.3) (7.0) Net Finance Leasing (1.0) (1.3) Net Interest Paid (1.7) (2.1) Redemption of Share Capital 0.0 (1.9) Cash Flows from Financing Activities (5.1) 55.7 Net increase in cash and cash equivalents (19.2) 34.6 Opening Cash & Cash Equivalents Exchange Gains/(losses) (0.3) 0.3 Closing Cash & Cash Equivalents Cash Conversion (1) 153% 129% (1) Cash Conversion is calculated using Adjusted EBITDA and working capital movement, Adjusted EBITDA refers to normalised trading EBITDA, being EBITDA adjusted for share based payments & non-recurring items. Working capital movement is the variance between opening and closing debtors, creditors and stock adjusted for fixed asset accruals.

21 2016 Preliminary Results Presentation Page 21 Balance Sheet Summary 31-Dec-16 m 31-Dec-15 m Non-Current Assets Current Assets Current Liabilities Working Capital (81.2) (73.8) Net debt position of 19.4m at 31 December 2016 Reduction in ROCE reflects capex in recent years focused on larger infrastructure projects Cash and Cash Equivalents Capital Expenditure Analysis Total Debt Non Current Liabilities m 2015 m 2014 m Net Assets Share Capital & Share Premium Capital Reserves (69.1) (65.4) Retained Earinings Equity Return on Capital Employed 18% 24% Service Areas PFS Rebrands Dealer USA Development sites Other Total

22 4. Outlook 2016 Preliminary Results Presentation Page 22

23 Outlook 2016 Preliminary Results Presentation Page Upgrades / Rebrands PFS Network expansion Service Area development 19 rebrands/upgrades completed in 2016 and a further four completed since 31 December including one TRSA conversion in the UK Programme ongoing 18 company owned sites added across ROI and UK in 2016 and 15 dealer sites Three further sites opened in the UK since 31 December and five in ROI (including four dealer sites), good pipeline for 2017 in both regions USA estate expanded by six during 2016 with two additional sites since period end Six additional service areas in 2016 (two UK, four ROI) Three additional Service Areas trading since 31 December (one TRSA in ROI, one MSA and one TRSA in UK), further sites being developed A number of UK Service Areas in the planning process We have a strong pipeline of further developments of both service areas and petrol filling stations across our markets. Non fuel sales remain strong in ROI in 2017 while fuel margin experience has been in line with Trading in the UK has also been positive and we remain confident on the prospects for the business for 2017.

24 5. Appendices 2016 Preliminary Results Presentation Page 24

25 Applegreen Customer Proposition 2016 Preliminary Results Presentation Page Low Fuel Prices Always price promise Better Value Always in store Food and beverage offering is high quality Entrepreneurial Culture Giving back embedded in company culture Charitable fund - circa 1m in 5 years

26 Applegreen plc Food and Beverage International brands complement Applegreen s own offer 2016 Preliminary Results Presentation Page 26

27 Irish Retail Supply chain Greater control and flexibility for retail propostition 2016 Preliminary Results Presentation Page 27 Distribution Centre Warehouse near Dublin: 60,000 sq ft with 10,000 sq ft Chilled/ Frozen Area Fully integrated IT systems with voice picking & automatic order generation by sites Tri temperature trucks Ambient, Chilled and Frozen combined Single delivery for sites for majority of product in Republic of Ireland Facilitates own brand products 106 stock keeping units Ambient - water; motor accessories Chilled milk; chilled foods Sandwiches; Food to go Enables delivery of value to consumer and enhanced margin for company

28 Applegreen estate: Ireland locations 2016 Preliminary Results Presentation Page 28 MSA / TRSA PFS Dealer

29 Applegreen estate: UK locations 2016 Preliminary Results Presentation Page 29 MSA / TRSA PFS

30 Applegreen estate: US Locations 2016 Preliminary Results Presentation Page 30 PFS

31 2016 Preliminary Results Presentation Page 31 Executive Directors Senior Management Bob Etchingham Chief Executive Officer Joe Barrett Chief Operating Officer Paul Lynch Chief Financial Officer Eugene Moore Developments Director John Diviney Managing Director UK Founded the business in years in fuel industry Strategic vision on Applegreen s position in the forecourt sector Led aggressive growth in footprint capitalising on opportunities presented by the downturn Joined the business in its 2nd year of operation Co-owner with Bob Etchingham Background in retail and FMCG Key responsibility for management and development of retail proposition Delivered strong partnerships with international food brands Non-Executive Directors A chartered accountant with extensive corporate finance and management experience across a number of sectors Served as a Director of an Irish plc for 5 years Worked with Applegreen on the delivery of their refinance in 2013 and joined as Finance Director in July 2014 Joined Applegreen in 2011 having previously served as a Director of Bennett Construction Also served as a non executive director of the National Roads Authority Leads development activity for Applegreen with responsibility for the in-house construction team responsible for recently opened MSAs and TRSAs Joined Applegreen in 2013 as Head of Corporate Finance and Treasury and was appointed Director of Food Systems and Trading in 2015 Moved to the UK in 2016 to lead the ongoing expansion of UK operations Previously held senior roles with the Royal College of Surgeons in Ireland and the Sherry FitzGerald Group Danny Kitchen Independent Non-Executive Chairman Howard Millar Independent Non-Executive Director Martin Southgate Independent Non-Executive Director Brian Geraghty Independent Non-Executive Director Chairman of Hibernia REIT plc Non-Executive Chairman of Workspace Group plc and Non- Executive Director of LXB Retail Properties plc Previously Finance Director of Green Property plc and Government appointed chairman of Irish Nationwide Building Society Deputy Chief Executive and CFO of Ryanair until he stepped down from that post in December 2014 Non executive director of Ryanair as well as Irelandia (Ryan family investment company) Former Managing Director of JTI UK & Ireland (Global tobacco company B&H, Silk Cut, Camel etc.) Director of Gallaher Pensions Ltd London Philharmonic Concert Orchestra Advisory Council Member Wide ranging general management experience Senior partner in Phelan Prescott & Company, a long established Dublin accounting firm Director of Get Cover & Company and QYouTV International Founding Director of The Little Museum of Dublin Chartered Accountant (Fellow of Chartered Accountants Ireland)